Formula Management Scales Up Process Manufacturing

Introduction

Formulas are at the core of process manufacturing and managing them is a critical function in the product development cycle. However, we see manufacturers show little effort in how they store and access their formulas, often keeping them siloed. However, today’s connected world makes sharing information across business units critical.

Seldom are formulas managed with any regularity. We find them in manual logs or at best, Microsoft Excel files. Companies spend years perfecting a single formula, ensuring it is scalable and able to maintain consistent quality across all batches and then restrict access to it.

At Xcelpros, we help our clients modernize their formula management. Keeping these formulas updated and secure from prying competitors results in higher productivity. That translates into a stronger bottom line.

Enterprise Resource Planning (ERP) software such as Microsoft System Dynamics has the ability to manage formulas. An ERP brings consistency, product scalability and improved efficiency to formulas while achieving better compliance scores.

Formula management (FM) includes the ability to optimize formulas. It also creates and manages workflows, creates formula variants, manages labeling content, plans inventory for scaling up production and validates the formulas to meet regulatory requirements.

An essential part of electronic batch processing, FM helps modernize the product development process. The resulting efficiency increase results in shorter times to market.

Automating formulas ensures consistent products. It removes manual calculations of ingredients, their properties and costs, thereby removing a source of error.

This process also causes better regulatory compliance. It reduces the chances of recalls, rejections and fines. Each of these actions costs your firm money while negatively impacting brand value.

The Downstream Impact of Formula Management

As discussed above, formula management is at the core of process manufacturing. Using the chemical industry as an example, formulas are at the center of each company’s assets. The research and development (R&D) section likely has an “n number” of formulas and variations. When each formula is processed, it delivers a unique product. Having related formulas scattered across multiple locations increases the compliance hazard, reducing efficiency.

An integrated FM system gives top executives control of:

• Transparency in terms of cost – An integrated business application such as an ERP includes ways to control formulas. The software also shows costs associated with the manufacturing process. ERPs give you a holistic picture. They provide the downstream impact of a formula from raw materials procurement to setting end product pricing.
• Visibility of formula properties – ERPs let you analyze the change in physical properties of key ingredients in real-time. For example, you can vary the quantity or substitute one raw material for another. Making these changes in the ERP lets you see the impact on areas such as the nutritional value of products.
• Authentication and formula protection – This security feature helps an organization define access rights to each formula. It allows you to limit modification rights to a select few while giving master control to the administrator. The administrator can reverse any changes to the formula.

Your business deserves the power of a unified system for formula management.

ERPs are the Way Ahead

ERPs provide an effective solution with the ability to unify production processes with research and development formulation in a common, secure platform. ERP systems can transform the way formulas are managed by players in industries such as chemical, pharmaceutical, food & beverages, etc.

Keeping formulas confidential is critical for every manufacturer in every industry. Managing formulas efficiently can be a competitive advantage, especially when a company is growing.

Instead of making FM a daunting task, using an ERP ensures your manufacturing processes are standardized across your production units regardless of their location.

ERPs are Transformational

Modern businesses generate gigabytes of data every single day. That number continues to increase as handheld devices and connected systems add to it. ERP software is designed to handle massive volumes of data. It generates insights letting top executives gain deeper understanding of core business functions. Using an ERP, top leaders can see the data behind critical decisions.

Looking at batch processing, which includes FM, leaders have a centralized information source covering all products that being processed, manufactured or stored. Having access to this data in one spot lets leaders generate important business insights.

Batch size, quality, quantity and components are essential items captured by ERPs. The system allows organizations to set security controls ensuring only authorized personnel can access the firm’s trade secrets and formulas. The ERP also maintains a version history of all changes made to the formula, letting authorized people go back to a previous version in case of unauthorized access.

Connecting Silos

In many businesses, data is captured and stored in stand-alone “silos.” A problem with this approach is its inability to share data. This is especially true when data from multiple business functions is captured in different systems.

Siloed data is not easily accessible from systems outside that area. It doesn’t give key executives enough variables to make informed decisions. The silo approach causes inefficiencies and lower returns on investments from technology assets.

Today is the age of connected business ecosystems, not stand-alone silos. Collaboration is the key to efficiency, transparency and easier operations. Sharing data means quicker and informed decision making, all of which eventually leads to success. Only an ERP can break the silo walls, connecting your data to provide a complete 360-degree view of your production process.

A connected system helps you calculate formulas and break down the costs of each product, percolating down to provide improved competitive and operational advantages.

ERP Software Systems and Formula Management

Some areas where ERPs are instrumental in formula management include:

• Versioning formulas
• Scaling formulas to create larger batches
• Determining and establishing coproducts or byproducts
• Categorizing active ingredient formulas by
  • Weight
  • Percentage
  • Operations related to ingredient consumption
  • Approvers
  • Batch sizes

Versioning Formulas for Compliance

Process manufacturers are continually updating and improving their formulas. Updates are driven by changing industry trends, customer demand and most importantly, ever-changing regulations.

Keeping up with rule changes is a constant task, especially for companies with multinational manufacturing and distribution operations. They must be compliant with the laws in each country where they operate.

Compliance impacts formulas directly, making keeping different versions a “must have” feature. For example, formaldehyde is a chemical agent dangerous to humans at levels of 100 parts per million. It is banned for use in cosmetics across the European Union but is found in hair-straightening products and nail polish in the US. Atrazine is used as an herbicide in the US, but was banned in the EU since 2003 over concerns of it polluting water bodies.

Differing regulations requiring different formulas—even with minor alterations—can be intimidating. Formulas must be managed properly to meet the regulations in each country or region.

Scaling Formulas for Consistency

Another formula function ERPs automate is scaling. When a customer changes its order size, the quantity of raw materials varies. Formulas do not.

To the uniformed, the impression of an ERP at a manufacturing location is like taking a widget, adding some gadgets plus a few man hours and presto, you have a finished product. This is at best oversimplification and at worst a mathematically challenging extrapolation.

Why is scalability a challenge? Consider a scenario where you are preparing soup for a family of four. Something happens. Now you need to make soup for your neighborhood, maybe your city or even your county. Most people realize your raw materials will increase as you add people, but what about making your soup look and taste the same or ensuring your serving quantity is right?

To accomplish all of this requires software that can scale production while maintaining consistency in product composition. An ERP solution such as Microsoft Dynamics 365 for Finance and Operation can help categorize all your formulas based on parameters such as: weight, percentage, ingredients, production size, approvers, etc. Top executives have complete control of their manufacturing operations regardless of how many customers one product serves.

Creating New Efficiencies

In addition to providing consistent products regardless of batch size or manufacturing location, ERPs can help manage your formulas to create new levels of efficiency by:

• Ensuring changes made to a formula have real-time implications to raw material procurement, production, inventory management and planning.
• Scaling formulas regardless of production size.
• Adjusting user fields to suit current requirements and configurations.
• Keeping tabs on production costs such as raw materials, labor and other variables based on changes to your formula.

Conclusion

Most chemical manufacturers have a legal pre-defined volume to weight ratio for using certain ingredients. The process becomes more complex when using multiple measurement units of such as dry and wet volumes. Adding to the complexity are when different measuring systems are used, such as imperial in the US compared to metric elsewhere. The complexity increases when adding storage temperature or acidity of the ingredients into the mix. How will a particular chemical or ingredient react when it comes in proximity or contact with another agent? Will it lose effectiveness at a specific temperature?

An ERP’s formula management function allows companies to automate the production process. The integration process also means firms can publish relevant labels. These labels are pasted on the products providing required information.

Using FM in an ERP lets companies concentrate on the business of selling products. They can avoid the costs and headaches caused by an inefficient formula management process. Powered by a self-sustained connected ecosystem hosting a universe of business applications, Microsoft Dynamics 365 offers a secure and holistic formula management suite. Dynamics 365 ensures your formulas are secure, scalable, compliant and most importantly, strategically placed to elevate your organization to the next level of efficiency.